DALLAS, Nov. 3 /PRNewswire-FirstCall/ -- Belo Corp. (NYSE:BLC), one
of the nation's largest pure-play, publicly-traded television
companies, today reported pro forma earnings per share of $0.05 in
the third quarter of 2009, in line with analysts' estimates,
compared to net earnings per share of $0.14 in the third quarter of
2008. Pro forma earnings per share in the third quarter of 2009
exclude a non-cash impairment charge to intangible assets.
Including the non-cash impairment charge to intangible assets, the
GAAP net loss per share for the third quarter of 2009 was ($1.47).
The Company also announced it is nearing the completion of an
amendment to its bank credit facility, the effectiveness of which
will be subject to the completion of a separate financing. The
Company currently expects the amendment and separate financing to
be completed and effective by the end of November. Dunia A. Shive,
Belo's president and Chief Executive Officer, said, "The Company's
third quarter total revenue decline of 17.7 percent was an
improvement over second quarter's revenue decline of 23 percent,
and is noteworthy given the significant political and Olympics
revenue generated in the third quarter of 2008. Spot revenue,
excluding political, declined 16 percent in the third quarter of
2009, an improvement from the 28 percent decline experienced in the
second quarter of 2009. When factoring out the Olympics impact in
August of 2008, monthly percentage declines in the Company's core
local and national spot revenue have improved sequentially from May
through October. The Company's combined station and corporate
operating costs decreased 9 percent in the third quarter of 2009
compared to the third quarter of 2008 due primarily to cost-saving
measures implemented over the past year. The Company generated $35
million in consolidated EBITDA in the third quarter of 2009, and
reduced its debt by $27 million during the quarter. Once completed,
the contemplated amended credit facility will provide the Company
greater capacity under the facility's leverage and interest
coverage covenants and greater flexibility for the Company going
forward." Third Quarter in Review Operating Results Total revenue
decreased 17.7 percent in the third quarter of 2009 versus the
third quarter of 2008. Total spot revenue, including political, was
down 21.5 percent with 15 percent and 18 percent decreases in local
and national spot, respectively. Third quarter 2009 revenues were
affected by the soft advertising environment, particularly in the
automotive category which was down 36 percent compared to the third
quarter of 2008. Political revenue of $2.1 million in the third
quarter of 2009 was $9.6 million lower than the third quarter of
2008. Olympics revenue totaled $9.7 million in the third quarter of
2008. Advertising revenue associated with Belo's Web sites
decreased 7.2 percent to $7.4 million in the third quarter of 2009.
Retransmission revenue totaled $10.6 million in the third quarter
of 2009 and represented 7.5 percent of the Company's total revenue
for the period. Total station expenses decreased 11 percent in the
third quarter of 2009 versus the same period last year due
primarily to the continued implementation of cost-saving measures.
Station EBITDA in the third quarter of 2009 was down 29 percent
versus the prior year. The station EBITDA margin for the third
quarter of 2009 was 31 percent compared to 36 percent in the third
quarter of 2008. The third quarter of 2009 includes a non-cash
impairment charge of $242 million ($155 million, net of tax)
reflecting a reduction in the fair value of the Company's FCC
licenses. The charge was determined during Belo's quarterly
impairment testing of goodwill and other intangible assets using
the methodology prescribed by generally accepted accounting
principles. The non-cash impairment charge will not affect Belo's
liquidity, cash flows from operating activities or debt covenants,
or have an impact on the Company's future operations. Corporate
Corporate operating costs were $7.7 million in the third quarter of
2009 compared to $6 million in the third quarter of 2008. The
increase was due primarily to higher non-cash share-based
compensation expense associated with the Company's increased stock
price and a decrease in the credit to pension expense. Other Items
Belo's depreciation and amortization expense increased 4.5 percent
to $11.5 million in the third quarter of 2009, up from $11 million
in the third quarter of 2008. Interest expense decreased $5.5
million, or 26 percent, in the third quarter of 2009 versus the
third quarter of 2008. Other income, net, decreased $1.2 million in
the third quarter of 2009 due primarily to a loss on the sale of
certain non-operating assets. Income tax expense decreased $93.2
million in the third quarter of 2009 due primarily to an $87
million tax benefit associated with the aforementioned impairment
charge. Total debt at September 30, 2009 was $1.042 billion, a
reduction of $50 million from December 31, 2008. The Company's
leverage and interest coverage ratios, as defined in the Company's
bank credit facility, were 5.6 and 3.0 times, respectively, at
September 30, 2009. The Company invested $1.7 million in capital
expenditures in the third quarter of 2009, down from $3.6 million
in the third quarter of 2008. Capital expenditures for the year are
expected to be less than $10 million. Other Matters The Company
announced today it is nearing the completion of an amendment to its
bank credit facility, the effectiveness of which will be subject to
the receipt of proceeds of a separate financing, which will be used
to reduce the outstanding balance and commitments under its $550
million credit facility. Although Belo was in compliance with the
terms of its credit facility at quarter end, the contemplated
amendment is expected to allow for additional capacity under the
credit facility's leverage and interest coverage covenants and also
extend the term of a portion of the commitments under the bank
credit facility from June 2011 to December 2012. When finalized,
the extended credit facility is expected to provide for an increase
in pricing based on the Company's leverage ratio and other
modifications to the existing agreement. Also in September, Belo
and A. H. Belo Corporation amended the tax matters agreement
executed between the two companies at the time of the spin-off of
A. H. Belo in 2008. The amendment allows for the carry back of A.
H. Belo's losses generated following its spin-off to Belo's
pre-spin tax returns. After the tax matters agreement was amended,
Belo amended a previously filed tax return to generate a $12
million federal income tax refund. Belo will apply the refund
towards A. H. Belo's future pension obligations to the
Belo-sponsored pension plan. The refund is expected to cover any
2010 contributions required from A. H. Belo. Non-GAAP Financial
Measures A reconciliation of station EBITDA to earnings from
operations, a reconciliation of cash operating costs and expenses
before spin-off related costs to total operating costs and
expenses, and a reconciliation of net earnings from continuing
operations to pro forma net earnings from continuing operations,
are set forth in an exhibit to this release. Fourth Quarter Outlook
Regarding Belo's outlook for the remainder of the year, Shive said,
"The Company's core local and national spot business in October
2009 finished flat with October of last year, partially as a result
of the crowd-out effect on 2008 core business from political
advertising. For the fourth quarter overall, we expect the
percentage decline in core local and national spot business to
improve from the third quarter of 2009. However, because of $35.9
million in political revenue generated in the fourth quarter of
last year, the Company's total spot revenue percentage decline in
the fourth quarter of 2009 will be higher than the percentage
decline experienced in the third quarter of 2009. "Excluding
spin-off related charges, full year 2009 combined station and
corporate operating costs are expected to be approximately 13
percent lower than 2008, an improvement from previous guidance." A
conference call to discuss this earnings release and other matters
of interest to shareholders and analysts will follow at 1:00 p.m.
CST this afternoon. The conference call will be simultaneously
Webcast on the Company's Web site (http://www.belo.com/invest).
Following the conclusion of the Webcast, a replay of the conference
call will be archived on Belo's Web site. To access the listen-only
conference lines, dial 1-866-233-3843. A replay line will be open
from 3:00 p.m. CST on November 3, 2009 until 11:59 p.m. CST on
November 17, 2009. To access the replay, dial 800-475-6701 or
320-365-3844. The access code for the replay is 119977. About Belo
Corp. Belo Corp. (BLC) is one of the nation's largest pure-play,
publicly-traded television companies, with 2008 annual revenue of
$733 million. The Company owns and operates 20 television stations
(nine in the top 25 markets) and their associated Web sites. Belo
stations, which include affiliations with ABC, CBS, NBC, FOX, CW
and MyNetwork TV, reach more than 14 percent of U.S. television
households in 15 highly-attractive markets. Belo stations rank
first or second in nearly all of their local markets. Additional
information is available at http://www.belo.com/ or by contacting
Paul Fry, vice president/Investor Relations & Corporate
Communications, at 214-977-6835. Statements in this communication
concerning Belo's business outlook or future economic performance,
anticipated profitability, revenues, expenses, dividends, capital
expenditures, investments, future financings, impairments, and
other financial and non-financial items that are not historical
facts, are "forward-looking statements" as the term is defined
under applicable federal securities laws. Forward-looking
statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from those
statements. Such risks, uncertainties and factors include, but are
not limited to, uncertainties regarding the costs, consequences
(including tax consequences) and other effects of the Company's
spin-off distribution of its newspaper businesses and related
assets to A. H. Belo Corporation and the associated agreements
between the Company and A. H. Belo relating to various matters;
changes in capital market conditions and prospects, and other
factors such as changes in advertising demand, interest rates and
programming and production costs; changes in viewership patterns
and demography, and actions by Nielsen; changes in the
network-affiliate business model for broadcast television;
technological changes, including the national transition to digital
television in June 2009, and the development of new systems to
distribute television and other audio-visual content; changes in
the ability to secure, and in the terms of, carriage of Belo
programming on cable, satellite, telecommunications and other
program distribution methods; development of Internet commerce;
industry cycles; changes in pricing or other actions by competitors
and suppliers; Federal Communications Commission and other
regulatory, tax and legal changes; adoption of new accounting
standards or changes in existing accounting standards by the
Financial Accounting Standards Board or other accounting
standard-setting bodies or authorities; the effects of Company
acquisitions, dispositions and co-owned ventures; general economic
conditions; and significant armed conflict, as well as other risks
detailed in Belo's other public disclosures and filings with the
SEC including Belo's Annual Report on Form 10-K/A. Belo Corp.
Consolidated Statements of Operations Three months ended Nine
months ended In thousands, September 30, September 30, except per
share ------------- ------------- amounts 2009 2008 2009 2008
----------------- ---- ---- ---- ---- (unaudited) (unaudited)
(unaudited) (unaudited) Net Operating Revenues $140,617 $170,823
$418,923 $534,619 Operating Costs and Expenses Station salaries,
wages and employee benefits 47,002 56,523 145,211 175,851 Station
programming and other operating costs 49,972 52,567 147,556 156,659
Corporate operating costs 7,743 5,954 21,891 21,662 Spin-off
related costs - - - 4,659 Depreciation 11,520 11,025 32,279 32,233
Impairment 242,144 - 242,144 - ------- ------ ------- ------ Total
operating costs and expenses 358,381 126,069 589,081 391,064
Earnings from operations (217,764) 44,754 (170,158) 143,555 Other
income and expense Interest expense (15,654) (21,188) (45,566)
(65,427) Other income (expense), net (657) 543 12,907 1,616 ------
------ ------ ----- Total other income and expense (16,311)
(20,645) (32,659) (63,811) Earnings from continuing operations
before income taxes (234,075) 24,109 (202,817) 79,744 Income taxes
(83,554) 9,672 (71,502) 49,808 ------- ------ ------- ------ Net
earnings from continuing operations (150,521) 14,437 (131,315)
29,936 Discontinued operations, net of tax - - - (4,499) --------
------- -------- ------ Net earnings $(150,521) $14,437 $(131,315)
$25,437 ========= ======= ========= ======= Net earnings per share
- Basic(1) Earnings per share from continuing operations $(1.47)
$0.14 $(1.28) $0.29 Loss per share from discontinued operations - -
- (0.04) ----- ----- ----- ----- Net earnings per share - Basic
$(1.47) $0.14 $(1.28) $0.25 ====== ===== ====== ===== Net earnings
per share - Diluted(1) Earnings per share from continuing
operations $(1.47) $0.14 $(1.28) $0.29 Loss per share from
discontinued operations - - - (0.04) ----- ----- ----- ----- Net
earnings per share - Diluted $(1.47) $0.14 $(1.28) $0.25 ======
===== ====== ===== Cash dividends declared per share $- $0.15
$0.075 $0.225 ====== ===== ====== ====== (1) Effective January 1,
2009, the Company adopted Accounting Standards Codification (ASC)
260-10 (formerly Financial Accounting Standards Board Staff
Position EITF 03-6-1) which requires the Company to consider
unvested share-based payment awards in its calculation of net
earnings per share (EPS). This change in the calculation of EPS is
retroactive and is reflected in the EPS amounts shown for 2008.
Belo Corp. Consolidated Condensed Balance Sheets September 30,
December 31, In thousands 2009 2008 ------------- ---- ----
(unaudited) (restated) Assets Current assets Cash and temporary
cash investments $3,277 $5,770 Accounts receivable, net 116,365
138,638 Other current assets 35,090 22,276 ------ ------ Total
current assets 154,732 166,684 Property, plant and equipment, net
182,313 209,988 Intangible assets, net 1,149,272 1,391,416 Other
assets 73,569 81,091 --------- --------- Total assets $1,559,886
$1,849,179 ========== ========== Liabilities and Shareholders'
Equity Current liabilities Accounts payable $13,618 $19,385 Accrued
expenses 51,945 51,399 Other current liabilities 20,599 39,027
------ ------ Total current liabilities 86,162 109,811 Long-term
debt 1,042,470 1,092,765 Deferred income taxes 159,629 234,452
Other liabilities 220,224 225,248 Total shareholders' equity 51,401
186,903 ------ ------- Total liabilities and shareholders' equity
$1,559,886 $1,849,179 ========== ========== Belo Corp. Non-GAAP to
GAAP Reconciliations Station EBITDA Three months ended Nine months
ended September 30, September 30, ------------- ------------- In
thousands (unaudited) 2009 2008 2009 2008 ------------------------
---- ---- ---- ---- Station EBITDA (1) $43,643 $61,733 $126,156
$202,109 Corporate operating costs 7,743 5,954 21,891 21,662
Spin-off related costs - - - 4,659 Depreciation 11,520 11,025
32,279 32,233 Impairment 242,144 - 242,144 - ------- ------ -------
------ Earnings from operations $(217,764) $44,754 $(170,158)
$143,555 ========= ======= ========= ======== Note 1: Belo's
management uses Station EBITDA as the primary measure of
profitability to evaluate operating performance and to allocate
capital resources and bonuses to eligible operating company
employees. Station EBITDA represents the Company's earnings from
operations before interest expense, income taxes, depreciation,
amortization, corporate expense and spin-off related operating
costs. Other income (expense), net is not allocated to television
station earnings from operations because it consists primarily of
equity in earnings (losses) from investments in partnerships and
joint ventures and other non-operating income (expense). Total
Operating Costs and Expenses Before Spin-Off Related Costs In
thousands (unaudited) Three months ended Three months ended
September 30, 2009 September 30, 2008 -------------------
------------------- Station Corporate Combined Station Corporate
Combined ------- --------- -------- ------- --------- -------- Cash
operating costs and expenses before spin- off related costs $96,974
$7,743 $104,717 $109,090 $5,954 $115,044 Depreciation 10,637 883
11,520 9,607 1,418 11,025 Impairment charge 242,144 - 242,144 - - -
------- ----- ------- ------- ----- ------- Total operating costs
and expenses $349,755 $8,626 $358,381 $118,697 $7,372 $126,069
======== ====== ======== ======== ====== ======== Nine months ended
Nine months ended September 30, 2009 September 30, 2008
------------------- ------------------- Station Corporate Combined
Station Corporate Combined ------- --------- -------- -------
--------- -------- Cash operating costs and expenses before spin-
off related costs $292,767 $21,891 $314,658 $332,510 $21,662
$354,172 Depreciation 28,507 3,772 32,279 28,220 4,013 32,233
Spin-off related costs - - - - 4,659 4,659 Impairment charge
242,144 - 242,144 - - - ------- ------ ------- ------- ------
------ Total operating costs and expenses $563,418 $25,663 $589,081
$360,730 $30,334 $391,064 ======== ======= ======== ========
======= ======== Belo Corp. Non-GAAP to GAAP Reconciliations
(continued) Pro Forma Net Earnings From Continuing Operations In
thousands (unaudited) Three months Three months ended September
ended September 30, 2009 30, 2008 ---------------- ----------------
Earnings EPS Earnings EPS -------- --- -------- --- Net earnings
from continuing operations $(150,521) $(1.47) $ 14,437 $0.14
Spin-off related operating and financing costs, net of tax - -
Impairment charge, net of tax 155,420 1.51 - ------- ------ Pro
forma net earnings from continuing operations $4,899 $0.05 $ 14,437
$0.14 ====== ====== Nine months Nine months ended September ended
September 30, 2009 30, 2008 ----------------- ----------------
Earnings EPS Earnings EPS -------- --- -------- --- Net earnings
from continuing operations $(131,315) $(1.28) $ 29,936 $0.29
Spin-off related operating and financing costs, net of tax - 3,502
0.03 Gain from extinguishment of debt, net of tax (9,131) (0.09) -
Spin-off related tax charge - 18,235 0.18 Impairment charge, net of
tax 155,420 1.52 - ------- ------ Pro forma net earnings from
continuing operations $14,974 $0.15 $ 51,673 $0.51 ======= ======
DATASOURCE: Belo Corp. CONTACT: Paul Fry, vice president/Investor
Relations & Corporate Communications of Belo Corp.,
+1-214-977-6835 Web Site: http://www.belo.com/
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